Activities of rice importers hindering local production — Perm Sec

By Jimoh Babatunde

The Permanent Secretary, Federal Ministry of Agriculture and Rural Development, Arc. Sonny Echono, was in Lagos recently for the inauguration of the Nigerian Agric Business Group. He took time out to talk on the vex issue of rice waiver, the Growth Enhancement Scheme and the efforts of the ministry in creating jobs through youth empowerment as well as what they are doing in terms of agric financing. Excerpt:

On the issue of waivers for rice

Let me state that the federal ministry of agriculture is not in the business of waivers, we are primarily engaged in increasing local production of all our stables and cash crops.

However, we do recognised that in certain critical sector current production is below the demand for these products and in order to exercise some elements of control and to mitigate what we observed as reckless importation into the country, we sort approval and put in place a system of quotas for two main commodities to ensure that the total quantities of those commodities brought into the country fall within what is established as the supply gap, which is the difference between the demand and what we produced locally.

The big elephant has to do with rice and it is because we had a situation where we had a rice policy approved by the government in May 2014, under the policy there is some incentives for those who are investing in rice production and milling in the country.

That policy prioritised these segments in the two tier tariff structure that was put in place under the policy.

The policy first of all directs that an inter-ministerial committee comprising the Federal Ministry of Agriculture, the Federal Ministry of Trade and Investment, Finance and the National Planning Commission should come together in partnership with stakeholders in the sector like rice farmers, rice millers and other markets organisation to establish the supply gap.

And once that supply gap is established to allocate quotas to the two main segments. The first segments are the rice millers and investors, and the other segment are the rice traders.

The policy also established two tariff regimes, a lower tariff regime for those who are investing and producing rice here as well as those who are milling it. While those who are just trading and importing rice pay higher tariff.

What the inter-ministerial committee did was allocate quota in 2014. When this became operational, based on set pre-determined criteria, however, a few companies , many of them foreign decided to import way beyond what was allocated to them and wanted to pay the concessionary duties that was applicable to those who are investing and milling rice here, because they have some level of investment and milling activities.

But, the rider to this is that the moment you go beyond the quota allocated to you, you automatically fall into the group of those who are just traders and importers of rice and this what they have been trying to avoid paying.

We are taking a firm position that those who imported in excess of their approved quotas must pay the appropriate levies and that is what is going on.

There is no sacred cow, there are no waivers for anybody in this regard and we are together with the Ministry of Finance, the Central Bank and the Nigerian Customs service . We are compelling them to pay the right duties to Nigeria.

On the economic impact of the rice importers action

The impact of their action is like an economic warfare , because I want Nigerians to understand what is at play here through the reckless importation of one company that imported more than 4000 trailer loads of rice.

The impact of that is simple, it is an attempt to destroy the entire milling industry in this country if they do not pay duty, because by not paying duties they are able to dump rice in the country.

Their dumping price will be lower than the production cost of rice by Nigerian rice millers, because they have not paid the appropriate rice duties, which means the Nigerian rice millers will not be able to compete.

We are not even talking about the qualities of the imported rice, which are just rice released from silos after eight years. We also have similar rice in our silos here in Nigeria , but what they do in those countries and what we also do is to sell such rice to our feed mills, our poultry industry.

After storing rice for about eight years, you begin to worry about the nutritional contents of the stock, but what we normally do is to turn those rice to feeds both for poultry, fish and other sectors. But you know some Nigerians and other unscrupulous business men knowing such rice are sold at huge discount, go there to buy and bring them to Nigerians to eat.

Besides these concerns, there is economic warfare of trying to now make rice milling unprofitable in Nigeria and that way wipe out the entire milling capacity we have, because they will not be able to compete at the dumping price.

So, what is the backward effects of this?, if our rice mills cannot operate and many of them actually were closing down or suspending operations , it means they cannot buy rice paddy that is produced by Nigerian farmers, which is our primary concern.

And if they do not buy rice paddy from our farmers, not only will the farmers suffer loses, it will discourage them from farming in the next season, so the moment they stop producing in the following season you are now going into a full a circle, because the gap which we have carefully planed to be closing each year until we become self sufficient and begin to export, will now widen because the farmers will run away from production since they can not sell and the rice miller can not mill.

So this is just a dumping price to ensure that Nigeria millers cannot mill and Nigerian farmers will be discouraged from farming and we will now go back to them and their countries to import our rice 100%.

This is a serious business and we are taking it very seriously and we are not open to any compromise on this matter. They will pay the right duties and government will ensure they do that. I have the support of Mr. President on this regard.

On availability of enough rice paddy in the country

Precisely, this is the danger that we face and why we are taking this measure. Throughout the period that this debate was going on, we had huge paddy all along the rice producing states from our dry season farming that we implemented lasts year, from November – January.

economical.

With the development of two major varieties by our Lake Chad Research Institute, we are now getting yields that will enable our wheat farmers compete with imported wheat.

So, what are we doing?. We are multiplying seed, to ensure that we are able to get enough of these seeds to all farmers to plant and now up-scale. Two, we have now gotten the supports of our millers under the policy that we will introduce to ensure that until we do something similar to the quota we did in rice for wheat, to protect the local production industry.

We are also promoting the substitution of wheat so as to reduce our dependence on imported wheat especially now that we done have the foreign exchange to expend on this nature of import.

So for wheat, we target all the wheat farmers. We are giving them seeds at highly subsidized rate , up to 80% in terms of the seeds. This is because we want to ensure that if you produce wheat we will buy it back from you if the industries have not taken them.

Two, we will give the right quality of seeds to all farmers that want to cultivate wheat in the wheat regions. There are eight states now in the region and will become 12 after the insurgency might have receded. Government has bought lots of equipment to assist them , all of these we will release soon to wheat farmers to encourage them to grow more wheat in the dry season as wheat is grown only in that period.

On the four year agric plan

We articulated a policy with the supports of our partners that gave direction to where we will now take the Agriculture Transformation Agenda (ATA) forward. That policy is being revalidated , we are waiting for the state governments to settle down as it involves us working with them and many other stakeholders.

So that policy will be tabled at the Council Meeting on Agriculture later this year to adopt it as legal frame work of our intervention under the current administration over the next four years.

We are also making additional inputs from various specialists and the manifesto committee of the All Progressive Congress (APC) as well as sectoral agriculture advisers to make input into this as we are integrating additional ideas the current administration have into the policy and in November we will be able to adopt it.

On the revitalization of the agricultural sector

Mr. President gave us a target recently from which we are making submission to him soon, the four sectors are the resuscitation of the textile industry in this country, starting from cotton production to reviving our granary and then the textile mills , improving the quality of our seeds, making it available to people, so that we can create employment and also produce cotton not only for local consumption but for also possibilities for exports.

We are working on developing our livestock and dairy sector in terms of beef, in terms of milk as well as poultry, sheep and goat.

We are working in broadening the agricultural base to focus not only on crops and cash crops and also on other segments including fisheries. I am very impressed with level of investment coming into the fishery sector.

Since it is an aggressive policy we are doing and we have tied additional allocation to those who are developing and investing in fish here in the short term, because they have a stake to protect their investment and ensure that within few years also we move away from any issue of importing fish.

The other issues have to do with our extension and storage facilities . We are now introducing market forces and business initiative.

For example, we are introducing the warehousing system. Instead of government buying produce from farmers, we encourage the private sector to uptake these produce from farmers, so they are not all forced to sell their produce during harvest when the prices are the lowest. So farmers can now plan when to sell their produce.

We are producing credit, we have finished the one for rice farmers. Our rice farmers now have a window under which they can access credit through any bank of their choice at 9% maximum through the instrumentality of the Central Bank with our partnership with them.

We are also doing that for our fish farmers, and we will extend that to oil palm and other sectors where the CBN has listed those that we will no longer support with foreign exchange for import.

We are moving aggressively on our program and through that we have specific program for each crop, each sector. When we talk about oil palm, we are distributing around the country additional 3 million seedlings bringing to between 9 million seedlings we have developed with NIFOR over the last two and half years.

Last year, we completed the planting of 4.5 million seedlings, this year another 4.5 million. We gave 1.5 million seedlings to big time companies and another 3 million distributed across the entire belt. Those who are interested to contact our directors in the states.

We are also doing well in cocoa, our farmers are happy . From next year, you people will begin to see much of the results of things we have done in cocoa over the last three years. I am happy to tell you that we will soon join the millionaire club of cocoa producers.

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